Executive Directors

The total remuneration package

Bonus Investment Plan (BIP)

The BIP encourages personal investment and ongoing shareholding in Reed Elsevier shares to develop greater alignment with shareholders.

How the BIP works

Executive directors and other designated key senior executives may invest up to half of their cash bonus received under the AIP in Reed Elsevier PLC or Reed Elsevier NV securities. Subject to continued employment and their retaining these investment shares during a three-year performance period, participants will be awarded an equivalent number of matching shares.

The vesting of the matching shares is subject to the achievement of a performance condition. For the 2008 and 2009 matching awards this has been increased to at least 8% (from 6% in 2007 and 2006) per annum compound growth in Adjusted EPS over the three-year performance period. In the event of a change of control, the vesting of the matching shares is subject to the discretion of the Committee.

Contingent awards of matching shares made under the BIP to executive directors during 2008 and matching awards vested under the 2005-2007 BIP cycle are disclosed in Share-based awards. Adjusted EPS performance over the three years ended 31 December 2007 was 11.4% p.a. and exceeded the performance condition to vest the 2005 matching awards.

At the date of this report, the Committee determined that the performance condition in respect of the 2006-2008 cycle of the BIP had been met. Therefore, subject to continued employment through the vesting date, the 2006 matching awards will vest on 3 April 2009.